Tetradrip Pharma Private Limited

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.9.20 Crs. of Tetradrip Pharma Private Limited

Particulars

Facilities**	Amount(Rs.Crs)	Tenure	Rating*
Fund Based	9.00	Long Term	BWR B + (Pronounced as BWR Single B plus) (Outlook: Stable)
Non-Fund Based	0.20	Short Term	BWR A4 (Pronounced as BWR A Four )
Total	9.20	(Rupees Nine Crores and Twenty lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR believes the Tetradrip Pharma Private Limited business risk profile will be maintained over the medium term. the 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive'in case the revenues and profit show sustained improvement. The rating outlook may be revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures

KEY RATING DRIVERS

BWR has essentially relied upon the audited financial statements of Tetradrip Pharma Private Limited up to FY 16,FY 17,FY 18, provisional financial statements of FY 19 and projected FY 20, publicly available information and information / clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the  directors and locational advantage for setting up manufacturing unit in Burdwan district of West Bengal . However, the rating is constrained by the nascent stage of operations, low financial risk profile, working capital intensive nature of business and high competition from other established players in the market.

Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities

Strengths

Experienced Management:The Directors of the company Mr. Rajesh Khaitan, Mr. Arvind Khaitan and Mr. Sandeep Kumar Bhimrajka are  having more than a decade of experience in drugs manufacturing & distributorship of medicine in Pharmaceutical industry.

Locational Advantage:The company's  manufacturing facility is located in Burdwan cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.

Weakness

Nascent stages of operations:Though the company is incorporated since 2013, the commercial operations started in FY 2018. The scale of operation remained low as its FY 18 revenue stood at Rs.0.64 Crs.

Low Financial risk profile:  The  financial risk profile is marked by low scale of operations, negative profitability, moderate networth & negative debt coverage indicators. Though the company was incorporated in 2013, the scale of operation remained low as its FY 18 revenue stood at Rs.0.64 Crs. TPPL reported net loss of Rs.0.67 Crs and operating loss of Rs.0.03 Crs in FY18. The Tangible net worth of the company stood  moderate at Rs. 3.20 Cr as on March 31, 2018 compared to Rs.2.24 Crs as on March 31, 2017. The interest coverage ratio (ISCR) and debt service coverage ratio (DSCR) of the company stood at (0.10) times and (0.03) times respectively in FY18 as compared to (30.68) times and (0.02) times in FY17.

Working capital intensive nature of business:The operations of TPPL are  working capital intensive as the company is into pharmaceutical industry, where high inventory is maintained.

Volatility in Raw material prices:The raw material consumption is the largest cost component of TPPL which constitutes about 70% of  cost of sales. Thus the margins of the company are exposed to fluctuation in  raw material prices .

Stiff Competition in the Pharmaceutical Industry: The Company faces intense competition in the domestic market 

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For ariving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

PROFILE

 

Tetradrip Pharma Pvt. Ltd. is Burdwan, West Bengal based private limited company promoted by Mr. Rajesh Khaitan, Mr.Arvind Khaitan and Mr. Sandeep Kumar Bhimrajka in 2013. The commercial operations of the company  started in 2018. The Company  is engaged in manufacturing of Haemodialysis Fluids for Kidney dialysis and Dry Powder Injection for the purpose of acute dehydration. The company is catering to private hospitals, nursing homes and drugs manufacturing companies all over the country, especially to eastern part of India. The company is manufacturing 6 types of Haemodialysis Fluids are used in nursing homes and hospitals and 30 types of Dry Powder Injection. The manufacturing facility is located in Burdwan district of West Bengal with an installed capacity of Haemodialysis Fluids of 2.40 lakhs containers and Dry Powder Injection of 300 lakhs of Vials p.a.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 17-18	FY 16-17
Operating Revenue	Rs.Crs	0.64	0.00
EBITDA	Rs.Crs	-0.03	0.00
PAT	Rs.Crs	-0.67	0.00
Tangible Net Worth	Rs.Crs	3.20	2.44
Total Debt/Tangible Net Worth	Times	2.23	2.49
Current Ratio	Times	0.84	12.40

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
1	Fund Based	Long Term	9.00	BWR B+ (Pronounced as BWR Single B plus) (Outlook: Stable)	NA	NA	NA
2	Non-Fund Based	Short Term	0.20	BWR A4 (Pronounced as BWR A Four )	NA	NA	NA
Total			09.20	(Rupees Nine Crores and Twenty lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf Investors queries can be sent to info@brickworkratings.com.

For More Information Contact:

Analytical Contacts	Investor Contacts
Saroj Kumar Das sarojkumar.d@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K.Venkateswara Raju Associate Director-SME & Vendor Gradings kvraju@brickworkratings.com
1-860-425-2742

SL.No.	Name of the Bank	Long Term(Rs.Crs)		Short Term(Rs.Crs)	Total(Rs.Crs)
		CC	TL
1	Central Bank of India	3	6	0.2	9.2
	TOTAL (Rupees Nine Crores and Two lakhs Only)	3	6	0.2	9.2